The Micro- and Macroeconomic Consequences of Macroprudential and Monetary Policies

This project studies the consequences of macroprudential and monetary policy for households and for the wider macroeconomy. It uses microdata on households to measure responses of households to policies. These responses are used to guide development of heterogenous agent macroeconomic models.

For this purpose the project consists of three interrelated studies.The first study documents households´ responses to macroprudential policies in a regulatory data set from Finansinspektionen and from registry-based data from Statistics Sweden.

Responses, which are considered to be distortions, are measured at the level of individual households.The second study integrates the facts from the first study into a heterogenous agent macro model to be developed by the project team.

The model provides a unified framework to trade off costs and benefits of macroprudential policies.The third study concerns monetary policy transmission. This is a classic topic in Economics and nevertheless far from fully understood. One reason is that transmission channels change as the structure of the economy changes.

This study focuses on the transmission through defined contribution pension systems that place greater financial risk exposure on households. The results will guide policy makers as well as the development of future heterogenous agent macroeconomic models.